Leibowits v. Leibowits

OPINION of the court

Per Curiam.

Section 234 of the Domestic Relations Law provides the authority for the issuance of an order restraining disposition of marital assets during the pendency of a divorce action. Therefore, compliance with the formalities and jurisprudential requirements of CPLR article 63 relative to preliminary injunctions is not a prerequisite to an order of restraint.

During the current action, the defendant husband moved for an order directing his wife to account for and turn over to him'the contents of a safe deposit box which she controlled and which contained securities and other assets, some of which were jointly owned and others of which the husband owned individually. In opposition, the wife contended that while her husband was entitled to the return of his inherited property, the remaining assets constituted marital property to which he was not entitled. Special Term ordered the plaintiff to account for the assets in the box and give the husband his inherited assets. However, the court denied the turnover motion insofar as it related to marital property on condition that the wife not dispose of the property during the litigation. Despite the wife’s failure to move for affirmative relief on her own behalf, the court also issued an order restraining the husband from disposing of marital property within his control. It is that directive which the husband now challenges as baseless in the absence of a motion for a preliminary injunction pursuant to CPLR article 63.

We conclude that Special Term erred in its sua sponte restraint of the husband’s disposition of marital property. Due process requires written notice from the moving spouse that he or she seeks possession of marital assets or a restraint on their disposition. Thus, the portion of the order restraining the husband from disposing of marital property should be deleted.

However, the portion of the order that restrained the wife from disposing of marital property as a less drastic alternative to the requested turnover application was a proper exercise of discretion and authority under section 234 of the Domestic Relations Law. The pertinent portion of that section provides: “In any action for divorce * * * the court may * * * make such direction, between the parties, concerning the possession of property, as in the court’s discretion justice requires having regard to the circumstances of the case and of the respective parties.” The section derives from section 1164-a of the former Civil Practice Act which applied to actions for separation and was enacted to decide the right of possession of real property held by the husband and wife as tenants by the entirety. Recognizing that a separation judgment does not terminate a tenancy by the entirety, the Legislature adopted section 1164-a in an effort to prevent the harm that could be caused by a vindictive spouse who attempted to transfer or encumber his or her interest in such property so as to harass the other spouse (Kahn v Kahn, 43 NY2d 203, 208; 1953 Report of NY Law Rev Comm, pp 485-486).

Section 234 of the Domestic Relations Law extended the judicial power over the possession of property to encompass both real and personal property. The power was clearly designed to be utilized without regard to the state of title (1963 Report of Joint Legislative Committee on Matrimonial and Family Law, NY Legis Doc, 1963, No. 34, pp 81, 84-85; 2 Foster-Freed, Law and the Family, § 22:37, p 103), and it gives the court “broad and flexible control” over the possession of property (Siegel, Practice Commentary, McKinney’s Cons Laws of NY, Book 14, Domestic Relations Law, § 234, p 33, 1982-1983 Pocket Part), by providing in-kind support through possession of real (Scampoli v Scampoli, 37 AD2d 614), or personal property (Troiano v Troiano, 87 AD2d 588; Silbert v Silbert, 22 AD2d 893, affd 16 NY2d 564), by excluding one spouse from premises occupied by another (Minnus v Minnus, 63 AD2d 966), or by restraining transfers of property pendente lite (Zeeve v Zeeve, 44 AD2d 838; Weaver v Weaver, 37 AD2d 614).

The section 234 power to direct one party to deliver possession to the other necessarily includes the power to prevent a party from frustrating such delivery by improper disposition of assets. In these days, that power of restraint is vital to meaningful enforcement of the equitable distribution statute. Not only is this conclusion consistent with the new law’s recognition of the parties’ “economic partnership” (Governor’s Approval Memorandum, McKinney’s Session Laws of NY, 1980, p 1863), but it has support in the State’s abiding interest in family relationships (Fearon v Treanor, 272 NY 268; di Lorenzo v di Lorenzo, 174 NY 467), especially in allocating the economic burdens so that members of the former family group are not “destroyed by crushing economic and psychological pressures” (Phillips v Phillips, 1 AD2d 393, 397, affd 2 NY2d 742). Absent the authority provided in section 234 of the Domestic Relations Law, a spouse who seeks to prevent the dissipation of marital assets would be compelled to obtain a preliminary injunction pursuant to CPLR article 63. Such injunctive relief would, in turn, require the moving party to post an undertaking and establish the probability of success. Considering the often great disparity between the financial capacities of spouses, the need to comply with article 63 would chill the efforts of the relatively impoverished to prevent the more affluent from frustrating justice by disposing of marital assets.

Accordingly, the order should be modified by deleting the provision restraining the husband from disposing of marital property during the litigation. As so modified, the order should be affirmed insofar as appealed from.